A former Duke Energy trader, who was indicted last year along with two former vice presidents, pleaded guilty in Houston last Thursday to falsifying the company books so that he could increase his bonus. Brian Lavielle, 34, also agreed to cooperate with prosecutors.
Lavielle was indicted last April along with former Duke executives Timothy Kramer and Todd Reid in a scheme that prosecutors allege was designed to artificially inflate energy trading volumes.
In a hearing before U.S. District Court Judge Nancy Atlas, Lavielle said he was asked to break up some November 2001 energy trades into smaller amounts before entering them into the records. The alleged fraud did not inflate Duke's earnings, and prosecutors contend the incentive to manipulate company books was to internally inflate the pool of cash awarded in bonuses.
Prosecutors allege more than 500 bogus round-trip trades resulted in $50 million in fraudulent profits on the books of Duke's Houston-based trading arm, Duke Energy North America. During the court hearing, Lavielle admitted to arranging three round-trip trades in November 2001 and entering the trades into company books as nine transactions at different volumes and prices.
In 2001, the indictment said Kramer received a $4 million bonus, Reid a $5 million bonus and Lavielle a $340,000 bonus.
"The work of this office and the federal agents involved in this and other similar cases should send a clear message to the American public," said Shelby. "We remain committed to restoring the public's faith and confidence in the market place and remain resolute in our joint efforts to hold corporate criminals accountable for their conduct."
In exchange for pleading guilty and agreeing to cooperate with the government, Lavielle will not face additional charges in a superseding indictment prosecutors plan to file in the case. Lavielle will be sentenced in December, and he faces up to 20 years in prison and a fine of up to $5 million. The sentence could be reduced or eliminated based upon his cooperation, according to Shelby.
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